Is there a way an ebook gets converted to azw3 and hyphenated when I press "Upload to device" button in Calibre?
Hyphenating a text that is not in a fixed presentation (page shape, or ratio page size/ font size) makes little sense as the words may change position on a line. Hence, I am assuming that what you are asking is how to automatically do soft hyphenation, so that the reader of the file can modify the font size and still get proper hyphenation where needed.
Soft hyphenation consist in marking with a special character (e.g. SHY) all the places in the text where a word can be hyphenated. Then the displaying device does not have to know hyphenation rules, which vary from language to language, and can simply use the markers to cut words when needed, which may vary depending the fonts chosen by the reader.
Can this be done by Calibre. I never had to do it myself, but Calibre does have a plugin that will do it. It is called Hyphenate This! and works for AZW3 and for EPUB. It is described in some details in this article of the-ebook-reader.com(with a download address), and is also discussed on mobileread.com. It can also be downloaded from Softpedia.
From what I have seen in the files, the whole code is in Python, so it is likely to be platform independent (Mac, Linux, Windows).
Now, if the question was whether soft hyphenation can be done without pushing an extra button, I cannot answer. But the OP does not seem very willing to add more details to his question.